A British owner who lets a French flat or house steps into one of the most technically demanding corners of French tax law. The same rent can fall under two completely different regimes depending on a single question: is the property let empty or furnished? An unfurnished letting produces revenus fonciers, property income, with a flat 30 per cent allowance for small landlords and a valuable deficit mechanism when works exceed receipts. A furnished letting is treated as a small business producing BIC (bénéfices industriels et commerciaux), industrial and commercial profits, with its own thresholds, allowances and accounting logic. On top of income tax come the French social charges, and for an owner who lives in Britain there is a minimum tax floor that does not exist for residents. The good news is that the France–United Kingdom double tax treaty signed on 19 June 2008 gives France the first right to tax French rental income while Britain grants a credit, so the same pound of rent is not taxed twice. This guide works through both regimes in the order an owner meets them: first the unfurnished rules, then the furnished rules with the registration duties that catch out owners in Paris, then the cross-border position of the British owner, and finally how to challenge a bill that looks wrong.

I. France Taxes Unfurnished and Furnished Lets Under Two Different Regimes

A. Unfurnished Letting Means Property Income, a 30 Per Cent Allowance and Deductible Works

When the tenant brings their own furniture, the rent is revenus fonciers. Article 14 of the Code général des impôts, the French tax code, provides that, subject to the article 15 exceptions for empty or owner-occupied buildings, “sont compris dans la catégorie des revenus fonciers, lorsqu’ils ne sont pas inclus dans les bénéfices d’une entreprise industrielle, commerciale ou artisanale, d’une exploitation agricole ou d’une profession non commerciale : 1° Les revenus des propriétés bâties,”. In plain terms, rent from a let empty flat or house belongs in the property-income basket, separate from wages, pensions and business profits, and each basket has its own deductions.

For modest rents the law offers welcome simplicity. Article 32 of the tax code states that “lorsque le montant du revenu brut annuel défini aux articles 29 et 30 n’excède pas 15 000 €, le revenu imposable correspondant est fixé à une somme égale au montant de ce revenu brut diminué d’un abattement de 30 %.” This is the micro-foncier regime: below 15,000 euros of gross annual rent, the taxable amount is simply 70 per cent of what the tenant paid, with no receipts to collect and no schedule of charges to draw up. A British owner who lets a provincial studio for 600 euros a month, or 7,200 euros a year, is taxed on 5,040 euros and never has to justify a euro of expenditure. The trade-off is that the allowance is fixed: if the boiler breaks and the roof leaks in the same year, the owner cannot deduct the real cost and still only gets the 30 per cent.

Once gross rent passes 15,000 euros, or as soon as the owner elects it, the régime réel, the actual-expenses regime, applies. Article 31 of the tax code lists the deductible property charges, beginning with “Les charges de la propriété déductibles pour la détermination du revenu net comprennent : 1° Pour les propriétés urbaines : a) Les dépenses de réparation et d’entretien effectivement supportées par le propriétaire ;”, followed by insurance premiums, unrecovered charges left behind by a departed tenant, co-ownership provisions, improvement works to dwellings and the local taxes that fall on the owner rather than the occupier. This is where a British landlord’s file is won or lost: every invoice for repairs, every taxe foncière bill, every managing agent’s statement must be kept, because the tax office can ask for them and the deduction stands or falls on paper. Loan interest is also part of the picture: article 156 expressly refers to the portion of a property deficit attributable to borrowing interest, which confirms that mortgage interest on the let property reduces the taxable result even though it is fenced off from the most generous part of the deficit relief described below.

That deficit relief is the déficit foncier, and it is the single most valuable planning tool for an owner who renovates between tenancies. Article 156 of the tax code provides that “Des déficits fonciers, lesquels s’imputent exclusivement sur les revenus fonciers des dix années suivantes ;”. A deficit can therefore shelter the next ten years of rental profit. Better still, part of it can shelter wages, pensions and other income at once: “L’imputation est limitée à 10 700 €. La fraction du déficit supérieure à 10 700 € et la fraction du déficit non imputable résultant des intérêts d’emprunt sont déduites dans les conditions prévues au premier alinéa.” The first 10,700 euros of a deficit caused by deductible works, excluding loan interest, comes off the owner’s total taxable income for the year, and any surplus carries forward, on total income for six years and on future rental income for ten. Take a concrete example. A British owner resident in France collects 12,000 euros of rent and spends 25,000 euros replacing the roof and rewiring a Normandy cottage. The rental result is a deficit of 13,000 euros before interest. Up to 10,700 euros reduces their total French taxable income immediately, and the balance shelters future rents for a decade. One condition runs through the whole mechanism and must be stated plainly: the part of the deficit set against total income only survives if the property stays let, unfurnished, for the following three years, so an owner who renovates and then sells or moves into the house themselves can see the relief clawed back.

Unfurnished rents are declared on the dedicated property schedule. The service-public information site devotes a full procedure page to the Déclaration n°2044 des revenus fonciers, the form 2044 on which landlords set out gross receipts, deductible charges and any deficit. Micro-foncier landlords simply report the gross figure on the main return, while réel landlords attach the 2044 detail. Filing is done online through the personal account on impots.gouv.fr, and the assessment that follows is the document to keep: every challenge starts from the figures and references printed on it.

B. Furnished Letting Is a Business: Commercial Profits, Micro Allowances and the Registration Duties

Put beds, a cooker and a table into the same flat and the legal nature of the income changes. Furnished letting is not property income at all: it is a commercial activity producing BIC. The Court of Cassation, in its commercial chamber, treats the question as settled vocabulary. In a judgment of 20 December 2023, pourvoi n° 22-17.612, it held that to test the preponderance of furnished-letting income against other household income “il convient de retenir, non les recettes brutes tirées de l’activité de location meublée professionnelle, mais le bénéfice industriel et commercial net annuel dégagé par cette activité”. Gross receipts and net commercial profit are different things, and only the net profit counts. For the British owner this distinction matters twice: it decides which tax basket the rent falls into, and it decides which expenses can strip the receipts down to the real gain.

The micro version of the business regime is article 50-0 of the tax code, and its thresholds sort lets into three groups. The text sets “1° bis 15 000 € s’il s’agit d’entreprises dont l’activité principale est de louer directement ou indirectement des meublés de tourisme, au sens du I de l’article L. 324-1-1 du code du tourisme”, meaning unclassified tourist furnished lets, against “2° 83 600 € s’il s’agit d’autres entreprises”, which covers ordinary long-term furnished lets. The taxable result is then the turnover reduced by a statutory allowance: “est égal au montant du chiffre d’affaires hors taxes diminué d’un abattement de 71 % pour le chiffre d’affaires provenant d’activités de la catégorie mentionnée au 1°, d’un abattement de 50 % pour le chiffre d’affaires provenant d’activités de la catégorie mentionnée au 2° et d’un abattement de 30 % pour le chiffre d’affaires provenant d’activités de la catégorie mentionnée au 1° bis. Ces abattements ne peuvent être inférieurs à 305 €.” In practice a classic furnished let of a British owner’s Lyon apartment at 15,000 euros a year leaves 7,500 euros taxable under the 50 per cent allowance, while an unclassified holiday let of the same turnover leaves 10,500 euros taxable under the 30 per cent allowance. The thresholds and allowances shown are those of the version in force on the date of writing and are indexed over time, so the figures on the current return always govern.

Above the thresholds, or by election, the owner moves to the business réel regime, where actual charges replace the allowance and, crucially, the building and furniture can be depreciated year by year. The statute itself hints at what is at stake: the micro allowances are legally deemed to cover straight-line depreciation already applied, which is the legislator’s way of saying that depreciation belongs to the réel world. For a newly bought or heavily refurbished property, depreciation of the building over several decades plus furniture over a handful of years can compress taxable profit far below the micro allowance, at the price of full accounts. This is a calculation to run with the purchase price, the works budget and the expected rent before choosing, because the micro election, once the thresholds are exceeded, is lost.

Furnished letting also carries administrative duties that unfurnished letting does not. A tourist furnished let, a meublé de tourisme, is defined by the tourism code as “des villas, appartements ou studios meublés, à l’usage exclusif du locataire, offerts à la location à une clientèle de passage qui n’y élit pas domicile et qui y effectue un séjour caractérisé par une location à la journée, à la semaine ou au mois.” Anyone offering such a let must first declare it: “Toute personne qui offre à la location un meublé de tourisme procède préalablement en personne à une déclaration soumise à enregistrement auprès d’un téléservice national”. In Paris and the other cities that use the authorisation system, a second layer applies: letting a home to short-stay visitors is a changement d’usage, a change of use, and the construction and housing code provides that in the listed municipalities “le changement d’usage des locaux à usage d’habitation peut être soumis, sur décision de l’organe délibérant, à autorisation préalable dans les conditions fixées à l’article L. 631-7-1.” The courts enforce this framework strictly. On 23 May 2025 the Council of State, in decision n° 476057 concerning a Paris company, upheld the city where the mayor had opposed a change of destination in a protected housing sector, recalling that a municipal certificate could not stand in for the proper procedure because “la destination du local au regard des règles d’urbanisme ne pouvait être déduite de ce document qui avait vocation à retracer les autorisations ou les déclarations dont il avait pu faire l’objet en application des dispositions des articles L. 631-7 et suivants du code de la construction et de l’habitation, et, alors, au surplus, que cette attestation se bornait à indiquer que le local n’avait fait l’objet d’aucune autorisation ou déclaration sur ce fondement”, before concluding “Le pourvoi de la société Dix pour Cent est rejeté.” A British owner tempted to list a Paris pied-à-terre by the night should therefore sort out the town-hall position before taking a single booking, a point developed in our companion guide to the registration and change-of-use rules for British second homes on Airbnb. At European level, the Court of Justice confirmed in the Airbnb Ireland case on 19 December 2019, C-390/18, that a platform putting hosts and guests in contact for payment must be classified as an information society service covered by Directive 2000/31, while an individual may resist national restrictions imposed without the notification that directive requires. The platform’s status does not exempt the host from the French town-hall rules.

II. The British Owner’s Cross-Border Position: Treaty Priority, Residence and Challenge

A. France Taxes First, Britain Gives Credit, and Non-Residents Face a Minimum Rate

The treaty rule is the anchor of every cross-border rental file. The French tax administration’s official commentary on the France–United Kingdom convention explains that the source state’s right to tax takes priority: the source state’s right to tax takes priority over the other state’s right, even where the buildings producing the income are not part of a permanent establishment in that state And it adds, for the avoidance of doubt, that under Article 6 of the convention France keeps the right to tax the property income arising on its territory. A British owner therefore declares the French rent in France first, whether resident in Kent or in the Dordogne, and the United Kingdom then relieves the resulting double charge. The British side of that relief is Foreign Tax Credit Relief, which HM Revenue and Customs describes in these terms: Foreign Tax Credit Relief when you report your overseas income in your tax return, adding that How much relief you get depends on the UK’s ‘double-taxation agreement’ with the country your income’s from and that You usually still get relief even if there is not an agreement, unless the foreign tax does not correspond to UK Income Tax or Capital Gains Tax. The mirror image of this article, our guide to British landlords taxed in France on their UK rental income, walks through the same machinery from the other direction.

Residence then decides how much France takes. An owner who lives in France is taxed on worldwide income at the ordinary progressive scale. An owner who lives in Britain and lets a French property is a non-resident with French-source income, and a floor applies. Article 197 A of the tax code provides that “l’impôt ne peut, en ce cas, être inférieur à un montant calculé en appliquant un taux de 20 % à la fraction du revenu net imposable inférieure ou égale à la limite supérieure de la deuxième tranche du barème de l’impôt sur le revenu et un taux de 30 % à la fraction supérieure à cette limite ;”. In other words, even if the progressive scale would produce a lower bill, the non-resident landlord pays at least 20 per cent on the lower slice and 30 per cent above, unless they can show that French tax on their worldwide income would be lower. This floor is the Brexit point that surprises most: before 2021 many British owners assumed European Union treatment would soften the calculation, but the minimum rate follows the statute, not the owner’s passport. The same non-resident owner must also remember that a French property can pull them into other French taxes, from the annual property taxes to the wealth tax on high-value holdings, each with its own return.

Two practical consequences follow. First, keep the two countries’ files consistent: the gross rent declared in France must match the foreign-income pages of the British Self Assessment return on which the credit is claimed, because a mismatch is the fastest route to an enquiry on either side. Second, appoint a French payment and correspondence channel that actually works: assessments, reminders and audit letters go to the address on the French file, and an owner who never sees them loses the chance to correct, explain or challenge in good time.

B. Social Charges on the Rent and the Route for Challenging a Wrong Bill

French rental income attracts social charges as well as income tax. The legal anchor is the solidarity levy on capital income: the administrative courts regularly apply article 1600-0 S of the tax code, which establishes a solidarity levy on the capital income listed in article L. 136-6 of the social security code. The Paris administrative court of appeal, in a judgment of 19 May 2020, n° 19PA01723, on a claim for repayment of social charges by a taxpayer disputing the levy, held that “La requête de M. B… est rejetée.” The lesson for a British owner is not that every claim fails but that these disputes turn on precise personal circumstances, above all on which country’s social security scheme covers the owner. European coordination rules allocate each person to a single scheme, and the treaty and European case law on affiliation decide whether the full French charges or a narrower levy apply. An owner covered in Britain who pays full French social charges on the rent without anyone examining their certificate of coverage may well be paying too much, while an owner who simply stops paying on the assumption that British coverage exempts them may be building arrears with late penalties. The correct posture is documentary: hold the proof of affiliation, the French assessment and the calculation side by side, and ask the question in writing before the sums compound.

When the bill itself looks wrong, the route is the standard French tax dispute ladder, and it rewards method rather than speed alone. The file begins at the tax office that issued the assessment, with a written claim identifying the tax, the year, the amount disputed and the legal ground: wrong basket, micro allowance wrongly refused, charges disallowed without reasons, deficit wrongly fenced, treaty credit omitted, social charges misapplied, minimum non-resident rate applied to a resident. Attach the lease, the rent statements, the works invoices, the return as filed, the assessment, the treaty article highlighted and the proof of British tax paid. If the office maintains the assessment, the dispute moves to the courts, where the judge decides on the papers the owner has built. Three habits make the difference between files that succeed and files that stall: challenge the assessment rather than ignoring it, keep every acknowledgement and reference number, and never mix the two countries’ arguments, so that the French judge sees French law applied to French facts and the British credit claim sees a clean French assessment it can rely on.

Conclusion

Letting a French property as a British owner is an exercise in classification before calculation. Empty, the let produces property income with a 30 per cent micro allowance below 15,000 euros, full deduction of real charges above it, and a deficit that can shelter total income up to 10,700 euros and future rents for ten years. Furnished, the let is a business with micro allowances of 50 or 30 per cent depending on the type of let, depreciation under the réel regime, and registration duties that become an authorisation question in Paris and the controlled cities. France taxes the rent first under article 6 of the treaty, Britain credits the French tax, non-residents living in Britain face a 20 and 30 per cent floor, and social charges apply through the solidarity levy whose scope the courts police case by case. Owners who classify first, declare consistently in both countries and challenge in writing on the assessment’s own terms keep every remedy open.